Weekend Reading – How not to be stupid, how real estate will correct, the 4% rule could fail and more #moneystuff

Weekend Reading – How not to be stupid, how real estate will correct, the 4% rule could fail and more #moneystuff

Welcome to my latest Weekend Reading edition where I share some of my favourite articles from the week that was across the personal finance and investing blogosphere.

BIG weekend of football folks. I hope to catch a few games while running some errands and getting caught up on things around home.

I would like to be outdoors, walking or hiking or maybe hitting the ski hill for the first time in a long time – but it’s very cold in the Ottawa tundra. I woke up to -20 deg. C without the windchill! I’m not going outside any longer than I have to today…

Here are the articles I posted on the blog this week – this one right below got lots of attention:

Use my promo code MYOCASH with BMO, so I can provide you with hundreds of dollars cash back when you invest with them. You can open a self-directed TFSA, RRSP or other account with BMO and own low-cost ETFs and/or dividend paying stocks like I do.

“Never assume that low-inflation rates are here forever. And don’t assume that the stock market will perform splendidly in the future. These are unknowns. As such, it’s prudent to maintain conservative levels of withdrawals. They should be lower than 4% for those who pay high investment fees.”

I didn’t link to this article but according to The Street’s Robert Powell, if you’re planning to retire in 2019 make sure you consider the following:

Mark Seed is the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've grown our portfolio to over $600,000 now - but there's more work to do! Our next big goal is to own a $1 million investment portfolio for an early retirement. Subscribe and join the journey!

5 Responses
to "Weekend Reading – How not to be stupid, how real estate will correct, the 4% rule could fail and more #moneystuff"

Great articles Mark! Thanks for all your research, it is so helpful. I haven’t seen where you talk about RRIFs, I could have missed it. Anyway I turned 71 in 2018 so had to convert my RRSP account into a RRIF. Not so easy and not much information out there about it, maybe you can do an article on this topic.
The easy part is that all my self-directed stocks went into my RRIF. Then you have to take out a minimum each year. Apparently there is a formula for this, but that percentage is not easy to find. Part of the money you take out is tax-free (that is what I was told, but I will find out if that is true come tax time!) I settled on taking out $350 on the 15th of every month. If you don’t keep an eye on the cash part of your RRIF (mine is from dividends), then they will randomly sell one or more stocks, they don’t ask me! I think I can handle this unless the market slips and/or companies reduce or stop paying dividends.
The other notable thing is choosing a beneficiary. If it is a spouse, that person will continue on the payment plan you set up. However if you want to name a second beneficiary, I think the 2nd beneficiary (or estate) has to withdraw all of it and taxes have to be paid, probably from the estate. I think this is the same as an RRSP, which rolls over to a spouse, but inheriting by a secondary beneficiary is a little murky – not just sure how this works.
Anyway I think it is important to have second beneficiaries, but most people that I know don’t have them. So if my husband dies, he is no longer the first beneficiary, then when I die, my 2ND beneficiary will have to pay taxes etc.

Mark, I enjoyed the ” how not to be stupid” story. Quite the helpful list for Diane.

Hi Diane,
Yes, you have to be careful to ensure the cash needed for payments for scheduled RRIF payments is there to avoid an unpleasant surprise. I established LIF payments myself last year. For the “No tax” I think maybe you’re referring to no tax withheld if payments are at minimum amounts according to the RRIF factor schedule. At year end all withdrawals are considered income for tax purposes, so you may want to consider if you need an amount of tax withheld(in context of all income sources), which you can specify to broker.

I also set up RRIF accounts and am having some money flowing into our account. Watch out for any extra payments being withdrawn. My bank accidentally gave me two deposits in January. It just took a phone call to correct.
Be careful that the added money doesn’t push you into the next tax bracket once you add all your income sources together. I use an income tax calculator (taxtips.ca has an easy one to use) to get a ball park and plan strategies.
It’s also a good idea to do some calculations on what would happen if a spouse passes. That can also push you into next tax bracket as you lose the opportunity to split RRIF income. We plan to gradual move money from RRIF with an extra payment to just below the next tax bracket and put into TFSA. I know if one of us passes, the survivor will get bumped into next tax bracket due to losing income/pension splitting opportunity.

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Join thousands of subscribers!

Save and get your TurboTax software now!

$50 signup bonus when you open and fund a new ModernAdvisor account!

Get a FREE insurance quote!

Use promo code MYOCASH to SAVE BIG!

FREE ONE MONTH trial mentioning My Own Advisor!!

Compare the best credit cards here

Best Credit Cards Canada

Mark Seed is one of Canada's leading personal finance and investing bloggers. As my own DIY financial advisor we've grown our portfolio to over $500,000 - but there's more work to do! Our next big goal is to own a $1 million investment portfolio for an early retirement.

Copyright 2009 to 2019 by My Own Advisor. All Rights Reserved. Designed by Dividend Ninja.